The foundations of sustainability: starting with decent livelihoods

There is no sustainability if farmers and workers live in poverty. Decent livelihoods are the foundation for farming communities to be able to tackle issues like child labour and deforestation. Fairtrade producers and partners have joined forces to lead the way on living income, living wages, and opportunities for women and young people.

Living incomes require partnership

Achieving a living income depends on a variety of elements, including sustainable crop yield, a viable farm size, and an adequate price. We calculate this price – our voluntary Living Income Reference Price – based on these parameters as well as the cost of living in a particular region. Earlier this year, we launched a second Fairtrade Living Income Reference Price for coffee, this time for Indonesia. Prices for additional coffee origins including Uganda, Honduras, Peru and Ethiopia are in development, with cost of living research and consultations with farmers and other stakeholders as part of the process. While global coffee prices were unusually high in the past year, cocoa prices are stagnant – the Fairtrade Minimum Price has been higher than market prices since April 2021.

To make living incomes a reality, farmers and cooperatives play their part by improving farm efficiency and practices. Governments set policies that raise the bar for fairer trade practices, and companies make longterm sourcing commitments with cooperatives and invest strategically in productivity, quality, diversification, financial literacy and more.

To that end, eight companies are currently paying the cocoa Living Income Reference Price to eleven cooperatives in Côte d’Ivoire and Ghana as part of pilot projects that also incorporate some of the other elements necessary for a living income, such as crop diversification. Other companies are working with Fairtrade cocoa cooperatives to strengthen one or more elements while continuing to pay the Fairtrade Minimum Price and Premium. Analysis of these initial projects is underway with farmers and commercial partners, so we can share learnings more broadly.

Fairtrade also developed a streamlined methodology for establishing living income reference price estimations, or ‘proxies’, whether for a region or a specific supply chain. Products include cashews from Tanzania, coconuts from Sri Lanka and orange juice from Brazil. Companies can take these steps together with cooperatives to build resilience and progress toward living incomes.

Decent work includes a living wage

The ability of workers to organize is fundamental to achieving decent work, including fair contracts, health and safety protections, gender equity,

Living income is the means that allows me to take care of my farm, that enables me to take care of my family, take care of my children in case of any illness, and also to be able to make achievements in the future.”

Finda Kouadio Théodore member of CAPRESSA cocoa cooperative in Côte d’Ivoire

Fairtrade is having a positive impact on producers’ income, wellbeing and resilience

A review of 63 studies showed that overall Fairtrade has a positive effect on farmer household incomes, assets and benefits such as education and health services. Fairer prices and the investments made possible by the Fairtrade Premium are important factors in this area. In addition, other factors such as better trading conditions and greater food security for households contribute to farmers’ and workers’ wellbeing.

Source: Jodrell and Kaoukji, Exploring Fairtrade’s Impact: A review of research on Fairtrade from 2015-2020 (2022) and a living wage. While the Fairtrade Standards spell out many requirements for plantations that hire workers, our ambition is that workers have the power to improve their own livelihoods and negotiate their terms of work.

Following the launch of the base wage for bananas in 2021 – which requires companies to pay at least 70 percent of a living wage – we are carrying out an analysis across major Fairtrade banana-producing regions to see whether progress has been made. As founding members of the Global Living Wage Coalition, we initiate research on gender pay gaps in agricultural supply chains, among other topics.

In late 2021, we launched a partnership with IDH sustainable trade initiative based on their salary matrix, a web-based tool that uses wage data to show the gap to the relevant region-specific living wage benchmark. With the ability of Fairtrade’s independent certifier, FLOCERT, to verify wage payments, several retailers are collaborating with Fairtrade to pay a ‘living wage differential’ in proportion to the volumes they source, to pay their share of closing the living wage gap.

In addition to the activities of our Workers’ Rights Advisory Committee, a number of projects support workers to know their rights, address unacceptable labour practices and strengthen collective bargaining. These include projects with workers on small-scale orange farms in Brazil (funded by Fairtrade Max Havelaar Switzerland), and with flower workers in Ethiopia and vineyard workers in South Africa (funded by the Finnish Ministry for Foreign Affairs).

Opportunities for women and young people mean a fairer future

The resilience of farms and families depends on everyone being able to contribute, and on young people having a promising livelihood.

Fairtrade leadership schools for women have been run in 19 countries, including one most recently launched in Timor-Leste. In the Asia Pacific region, 22 ‘small entrepreneurship projects’ led by leadership school participants are underway. In Latin America, 380 producers across six countries took part in CLAC’s schools in 2021.

The third cohort of students graduated from the school in Côte d’Ivoire at the end of 2021, bringing the total number of graduates to 121, with another cohort of 84 participants currently in progress with funding from the French government’s Equité 2 programme. Thanks to the school’s success, the Ivorian government has committed financial support for future rounds of the year-long programme.

New funding from the Norwegian Agency for Development Cooperation (Norad) is supporting the creation of a women’s leadership school in Ghana, and the launch of a young cooperative managers academy for cocoa farmers in Ghana and Côte d’Ivoire, which is now training 30 young farmers from 15 cooperatives.

The Fairtrade Global Youth Convention, a virtual global forum held in November, brought together young representatives of the three regional Fairtrade producer networks in Africa, Asia, and Latin America. Around 750 participants created networks and built skills in leadership, agripreneurship, climate change, and more.

NAPP is working with more than 20 young farmers to start a Youth Knowledge Hub in India, which will foster virtual and physical connections to share information and scale up learnings on agribusiness, diversified income opportunities, climate change issues, and using technology effectively in agriculture.